"I hope not to appear in 2008 as the skyrocketing it!" Has acquired a Canadian potash company news caused Chung's attention. He was in Guangzhou for almost 30 years of basic agricultural business known as potash imported. Once the foreign companies together will import potash fertilizer prices that are detrimental to his business.

         Chung worry. August 18 the world's largest mining company BHP Billiton the world's largest potash producer Potash launch business acquisition but were refused. A ripple. Many began to understand the industry as oligopolistic potash further concentrated to a small number of more than 50% of import dependence will gradually lose their pricing power in China or eventually become another potash iron ore will inevitably stuck Agricultural High potassium predicament.

Potash fertilizer production increasingly concentrated

        "Not only is the potash fertilizer market are currently in the situation of supply exceeding demand." Chung told reporters but the industry is gradually recovering from the financial crisis coming.

However, BHP Billiton and Chinese and is obviously not just immediate. The distribution of potassium territory long ago: January 28 BHP Billiton acquired Athabasca Potash Co. of Canada to gain more than 10,000 square km of exploration rights. In addition, it also has 17,000 square kilometers in Ethiopia potash exploration rights.

Why so much interest in mining giant Potash? South China Agricultural University professor told the Southern Daily Press Urea in potassium is essential for agricultural production materials. In the production of three main elements in fertilizer nitrogen, phosphorus come from other sources are more diversified processing and conversion; only potassium from potash and potash also basically exists only in potash relatively more scarce and difficult regeneration of nitrogen and phosphorus.

         Worthy of attention is increasingly focused in recent years, potash production. Chemical industry, who asked not be named, told analysts yesterday, the Nanfang Daily Press potash producers already concentrated and the concentration is gradually raised. BHP Billiton acquired at the occasion of Russia's two major potash Potash giant Potash Corporation Urals (Uralkali) and 西利维尼特 Potash Corporation (Silvinit) is seeking the merger, if successful will create a company with 11.5 million tons potash fertilizer production capacity of producers behind Canada's potash production capacity company.

"Russia's integration may make cartel currently accounts for 55% of global production share to 62%." The UBS report said.

In fact the integration of global potash fertilizer has more than two piles. BHP Billiton's competitors have long been involved in potash Vale area. Vale last year to 850 million U.S. dollars to expand Congli the hands of its potash assets acquired. Vale this year to 3.8 billion cash acquisition of the world's largest oilseed processor Bunge (BungeLimited) mineral fertilizer business in Brazil.

UBS report also said the company 西利维尼特 potassium changes in ownership are likely to join the BPC. With the addition of BPC 西利维尼特 potash company's export share from 29% to 44% with Canpotex combined share of about 64%. This may BPC have greater bargaining power in particular, strong demand in the global potash inventory levels are not high times.

"Production levels of integration and further focus on China and other importers manufacturers certainly less negative the more likely the formation of some price or yield on the 'secret deal' in the negotiations on the importer has the right to speak more." The analyst said .

The next iron ore?

Seems in Urea in China, whether BHP Billiton or Potash fuel-efficient lights are not maximize profits so acquired is not the key to success. He saw the positive point is that the media have called attention to the Chinese community started the safety of potassium.

As a big agricultural country, China's demand for fertilizer potash which is undoubtedly a huge global demand for about one-fifth. But China is also importing potash tired state share of total consumption accounted for more than 50%.

According to the China Salt Industry Association statistics: in 2008 China's potash consumption was 5.882 million tons apparent, K to 5.172 million tons of which 2,775,000 tons of domestic potash, potassium 3.249 million tons of imports and exports potash 142,000 tons. Domestic potash potash imports about 55% of apparent consumption (external dependence in 2007 reached a record 71.8% at one time) the actual demand and the gap between domestic production has reached 7.7 million tons.

From the supply side, although the global potash quantity sufficient but concentrated in a few countries, Canada accounted for only 53% of the amount of resources the world. China's current total reserves found in only 1 billion tons less than 1% of the world's total reserves are also accounted for just 1.6% of annual production. The 2010 China's potash fertilizer imports will be mainly from Belarus and Canada.

"K do not want to be the next iron ore." Accepted an interview with Nanfang Daily many people have expressed similar concerns. Both repeat itself. Lack of self-produced in China for iron ore ore imports more than half require a lot of BHP Billiton, CVRD, Rio Tinto iron ore shipping business volume control more than 70%. In addition, negotiations between the two also exists to import the same agreement and the market price of the "dual track" and kept in China's internal "monopoly profit." (Huang should come)